✌✌✌✌ THE HINDU ✌✌✌✌
✌✌ Demonetisation’s deflationary shock? ✌✌
That the Centre’s decision to withdraw high-denomination banknotes was going to impact economic activity in the short term was never in doubt. But the specific contours of the effects were probably a lot less understood at the time of that announcement. The deflationary shock has manifested itself in a deceleration in retail inflation, as demand for a range of goods and services has been damped. That the headline Consumer Price Index-based gauge hit a two-year low of 3.63 per cent for November is therefore no surprise, especially given the additional factor of a favourable base effect — the reading was 5.41 per cent in November 2015. The major contributor to the slowdown in price gains was the food and beverages group, where inflation eased to 2.56 per cent largely on the back of a slump in the prices of vegetables, a highly perishable commodity. But a closer look at the food group throws the spotlight on some trends that the Reserve Bank of India had flagged in its latest monetary policy review as areas of concern. Specifically, the prices of sugar and confectionery accelerated by 22.4 per cent while meat and fish and egg also reflected persistently elevated levels. The services sectors, including transport and communication and education, also manifested stickiness, underscoring the rationale for the RBI’s cautious approach in keeping benchmark interest rates unchanged.
Clearly, signals from the inflation data pose a conundrum before policymakers. With demand impulses taking a wide-ranging knock from the shortage of cash in the hands of consumers, proponents of policy accommodation would argue that the time is ripe for the RBI to cut borrowing costs to help impart some credit-fuelled economic momentum. But as the RBI’s Monetary Policy Committee itself articulated it on December 7, “while discretionary spending on goods and services in the CPI excluding food and fuel” could have been affected by restricted access to cash, the prices of those items may weather the transitory effects since they are normally revised according to preset cycles. More importantly, the MPC cautioned that food inflation pressures could re-emerge as a consequence of disruptions in agricultural activity as a result of the currency withdrawal. The spectre of upward price pressures from key components including food and fuel — OPEC’s output cuts are already pushing up crude oil — combined with the fading away of a favourable base effect could leave the RBI with little wiggle room to support growth. With the central bank’s March 2017 target for retail inflation of 5 per cent clearly in their sights, the monetary authorities may be persuaded to keep the powder dry.
✌✌ India’s winning streak ✌✌
India’s emphatic innings-and-36-run victory over England at Mumbai’s Wankhede Stadium has effectively broken a jinx. Among all its Test cricket rivals, discounting the hype around games against Australia or the history that permeates jousts involving Pakistan, England had been a bugbear. Twice, India lost Test series in England in 2011 and 2014; it also suffered the ignominy of losing at home in 2012. Redemption finally came in Mumbai as Virat Kohli’s men secured an unassailable 3-0 lead with just the fifth and final Test remaining to be played in Chennai, starting Friday. The cobwebs of the past have been shed and a new order is in place. In its last 17 Tests, India remained undefeated, the highlight being 13 wins. This equals the purple patch from 1985 to 1987 that featured four victories, 12 draws and a tie across 17 games. India can do one better if it wins or at least draws at Chennai. The current winning streak includes five consecutive Test series triumphs: Sri Lanka, South Africa, West Indies, New Zealand and England have been vanquished. From shedding the pangs of transition to charting its own path, the present squad has shown that it respects the aura of Tests and is fiercely motivated to win. It is a trait Kohli shares with coach Anil Kumble.
The squad’s twin arms, Kohli and R. Ashwin, have worked in pulsating tandem. As a batsman with a concurrent average of 50-plus across all three formats, Kohli is poised to join the league of legends. He has led from the front. England wilted under the weight of his bat that yielded 640 runs at an average of 128. He even played peacemaker when Ashwin and James Anderson had a spat in Mumbai. Ashwin, meanwhile, has powered India’s remarkable growth, with both ball and bat. He has bagged 27 wickets in this series, and the final contest at his home ground in Chennai may only enthuse him more. The team’s glory is not just restricted to Kohli and Ashwin, the rest have all put their hands up at various times. Be it Jayant Yadav, an able understudy to Ashwin the off-spinner and an effective batsman; Parthiv Patel, called in as a replacement wicketkeeper; seamer Mohammed Shami; or the reliable Murali Vijay, opening with assurance. The squad’s inherent strength hasn’t waned even when personnel are lost briefly due to injuries (Ajinkya Rahane or Rohit Sharma) or when form deserts (Shikhar Dhawan). India still has a long road to traverse and overseas wins in Australia and England need to be secured. But for now Kohli and his men are enjoying a stupendous home run.
✌✌✌✌ THE ECONOMIC TIMES ✌✌✌✌
✌✌ Arunachal’s hydel scam calls for probe ✌✌
Finally, the findings of a three-year-old investigation done by this paper on financial shenanigans in Arunachal Pradesh (https://goo.gl/y1Qnvf) are making media headlines. Charges against Kiren Rijiju, junior home minister at the Centre, might or might not hold water. His personal culpability or the lack of it must be established through an impartial investigation. However, the development points to the need for a broader probe into how Arunachal Pradesh pulled off probably India’s largest Ponzi scheme that has lasted almost two decades.
It all began during the NDA regime in 1999, when Delhi technocrats with little ground knowledge of Arunachal, but with akeen eye on its map, decided that the state could pump out an astounding 50,000-80,000 MW of electricity from its many fast-flowing Himalayan rivers. At the time, this was nearly three times the hydroelectric power generated in the country. By 2000, state-owned NHPC was tasked with six projects to generate nearly 21,000 MW. The Arunachal government quickly transferred five of these to private players. Between February 2006 and March 2009, it signed 130 MoUs for hydel projects, for 38,600 MW. Not one has completed construction. Companies, mostly from Andhra Pradesh, with experience in seeds, travel, highways and real estate rather than hydel projects, have fled.
Meanwhile, through licences, kickbacks from chains of contractors in planning, transport, materials and building, graft in Arunachal has swollen to gargantuan proportions. For the last 12 years, Rijiju has been part of Arunachal’s legislative politics with the BJP, Congress and now the BJP, again. He should cooperate in a probe to find out how and who conjured money out of water and thin air in the state., even as power has proved firmly elusive.
✌✌ Demonetisation’s deflationary shock? ✌✌
That the Centre’s decision to withdraw high-denomination banknotes was going to impact economic activity in the short term was never in doubt. But the specific contours of the effects were probably a lot less understood at the time of that announcement. The deflationary shock has manifested itself in a deceleration in retail inflation, as demand for a range of goods and services has been damped. That the headline Consumer Price Index-based gauge hit a two-year low of 3.63 per cent for November is therefore no surprise, especially given the additional factor of a favourable base effect — the reading was 5.41 per cent in November 2015. The major contributor to the slowdown in price gains was the food and beverages group, where inflation eased to 2.56 per cent largely on the back of a slump in the prices of vegetables, a highly perishable commodity. But a closer look at the food group throws the spotlight on some trends that the Reserve Bank of India had flagged in its latest monetary policy review as areas of concern. Specifically, the prices of sugar and confectionery accelerated by 22.4 per cent while meat and fish and egg also reflected persistently elevated levels. The services sectors, including transport and communication and education, also manifested stickiness, underscoring the rationale for the RBI’s cautious approach in keeping benchmark interest rates unchanged.
Clearly, signals from the inflation data pose a conundrum before policymakers. With demand impulses taking a wide-ranging knock from the shortage of cash in the hands of consumers, proponents of policy accommodation would argue that the time is ripe for the RBI to cut borrowing costs to help impart some credit-fuelled economic momentum. But as the RBI’s Monetary Policy Committee itself articulated it on December 7, “while discretionary spending on goods and services in the CPI excluding food and fuel” could have been affected by restricted access to cash, the prices of those items may weather the transitory effects since they are normally revised according to preset cycles. More importantly, the MPC cautioned that food inflation pressures could re-emerge as a consequence of disruptions in agricultural activity as a result of the currency withdrawal. The spectre of upward price pressures from key components including food and fuel — OPEC’s output cuts are already pushing up crude oil — combined with the fading away of a favourable base effect could leave the RBI with little wiggle room to support growth. With the central bank’s March 2017 target for retail inflation of 5 per cent clearly in their sights, the monetary authorities may be persuaded to keep the powder dry.
✌✌ India’s winning streak ✌✌
India’s emphatic innings-and-36-run victory over England at Mumbai’s Wankhede Stadium has effectively broken a jinx. Among all its Test cricket rivals, discounting the hype around games against Australia or the history that permeates jousts involving Pakistan, England had been a bugbear. Twice, India lost Test series in England in 2011 and 2014; it also suffered the ignominy of losing at home in 2012. Redemption finally came in Mumbai as Virat Kohli’s men secured an unassailable 3-0 lead with just the fifth and final Test remaining to be played in Chennai, starting Friday. The cobwebs of the past have been shed and a new order is in place. In its last 17 Tests, India remained undefeated, the highlight being 13 wins. This equals the purple patch from 1985 to 1987 that featured four victories, 12 draws and a tie across 17 games. India can do one better if it wins or at least draws at Chennai. The current winning streak includes five consecutive Test series triumphs: Sri Lanka, South Africa, West Indies, New Zealand and England have been vanquished. From shedding the pangs of transition to charting its own path, the present squad has shown that it respects the aura of Tests and is fiercely motivated to win. It is a trait Kohli shares with coach Anil Kumble.
The squad’s twin arms, Kohli and R. Ashwin, have worked in pulsating tandem. As a batsman with a concurrent average of 50-plus across all three formats, Kohli is poised to join the league of legends. He has led from the front. England wilted under the weight of his bat that yielded 640 runs at an average of 128. He even played peacemaker when Ashwin and James Anderson had a spat in Mumbai. Ashwin, meanwhile, has powered India’s remarkable growth, with both ball and bat. He has bagged 27 wickets in this series, and the final contest at his home ground in Chennai may only enthuse him more. The team’s glory is not just restricted to Kohli and Ashwin, the rest have all put their hands up at various times. Be it Jayant Yadav, an able understudy to Ashwin the off-spinner and an effective batsman; Parthiv Patel, called in as a replacement wicketkeeper; seamer Mohammed Shami; or the reliable Murali Vijay, opening with assurance. The squad’s inherent strength hasn’t waned even when personnel are lost briefly due to injuries (Ajinkya Rahane or Rohit Sharma) or when form deserts (Shikhar Dhawan). India still has a long road to traverse and overseas wins in Australia and England need to be secured. But for now Kohli and his men are enjoying a stupendous home run.
✌✌✌✌ THE ECONOMIC TIMES ✌✌✌✌
✌✌ Arunachal’s hydel scam calls for probe ✌✌
Finally, the findings of a three-year-old investigation done by this paper on financial shenanigans in Arunachal Pradesh (https://goo.gl/y1Qnvf) are making media headlines. Charges against Kiren Rijiju, junior home minister at the Centre, might or might not hold water. His personal culpability or the lack of it must be established through an impartial investigation. However, the development points to the need for a broader probe into how Arunachal Pradesh pulled off probably India’s largest Ponzi scheme that has lasted almost two decades.
It all began during the NDA regime in 1999, when Delhi technocrats with little ground knowledge of Arunachal, but with akeen eye on its map, decided that the state could pump out an astounding 50,000-80,000 MW of electricity from its many fast-flowing Himalayan rivers. At the time, this was nearly three times the hydroelectric power generated in the country. By 2000, state-owned NHPC was tasked with six projects to generate nearly 21,000 MW. The Arunachal government quickly transferred five of these to private players. Between February 2006 and March 2009, it signed 130 MoUs for hydel projects, for 38,600 MW. Not one has completed construction. Companies, mostly from Andhra Pradesh, with experience in seeds, travel, highways and real estate rather than hydel projects, have fled.
Meanwhile, through licences, kickbacks from chains of contractors in planning, transport, materials and building, graft in Arunachal has swollen to gargantuan proportions. For the last 12 years, Rijiju has been part of Arunachal’s legislative politics with the BJP, Congress and now the BJP, again. He should cooperate in a probe to find out how and who conjured money out of water and thin air in the state., even as power has proved firmly elusive.
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